To be honest, the figures are much as expected – although the holdings of Greek bonds will have decreased due to a fair amount of the holdings maturing (circa €10bn over the course of the SMP). The holdings of Italian bonds are interesting, given that we knew the ECB purchased almost €145bn of Spanish and Italian bonds, it is possibly a bit surprising that the level of Italian bonds outweighs Spanish so significantly (although it does broadly match the relative size of their debt markets). Still it highlights that necessary intervention to simply keep yields in these countries to below 7% was still very sizeable.
The move is positive for the transparency of the ECB (if a little late). Let us hope this is the start of a trend rather than a one off…
Looking at the amounts it seems to be near certain that the ECB already has taken some profits on these acquisitions. Which is simply a complete joke and the ultimate dodgy bookkeeping.
ReplyDeleteBookvalue compared to nominal is simply way too high. Greece apparently was bought for average 70%. This is (slightly) over 90%.
In this respect. The Dutch government last week while doing their course dodgy bookkeeping also did something similar. Guaranteed stuff for its CB (and offBS transaction of course, but nevertheless something like 6 Bn). As a consequence the CB made a something like an 800 Mn (book-) profit. Which could be distributed to the state and is considered revenue. Which makes it easier to keep close to the 3%. When the North begins you better look for your helmet.
ECB support of the Greeks is greater than this. The ECB has granted 100 billion euros in TARGET2 credits to the National Bank of Greece. This dwarfs its outright purchase of Greek bonds. It is the dirty little secret of how the ECB thwarts the will of the people of the EU. It is an open-ended line of credit that has grown every year since the inception of the EMU.
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